Most of the old complex, made up 47 buildings, was destroyed by the floodwaters of Tropical Storm Irene in August 2011.

Some of the original structures are being saved and will be connected to a new 90,000 square-foot building. It's the largest capital construction project ever for Vermont costing an estimated $125 million.

The entire complex will house about 1,200 state workers.

Shumlin said the new building is designed and will be built to withstand another flooding event.

“It means that next time we get a 500-year flood, we won't get flooded,” he said. “It means that we're going to deliver on our promise of rebuilding after Irene stronger and better than the way she found us.”

Local businesses and the Waterbury select board chair have been waiting for this day for years. Those thousand-plus workers brought commerce to downtown.

“It means that things are looking up,” said Chila Russell or Chila’s Coiffures. “It's the beginning of something good.”

“They're doing so much than just returning,” said select board chair Chris Nordle. “This is really an incredible facility that’s good for the state employees and it's good for the public that’s coming in to visit the state employees and it's also a great thing for Waterbury.”

Builders said the building will be extremely energy efficient. Of the 300,000 square feet of office space demolished, 94 percent has been recycled.